Posts Tagged ‘europe’
Once upon a time there was a president named George. He liked to do things his own way, which annoyed some of his “friends” in Europe. But then a new president named Barack was elected, who not only promised to be nicer to his friends, but was actually very popular in most parts of the [...]
The late Rudi Dornbsuch of MIT had a way of cutting to the chase, preferably in public and with a minister of finance present. He knew a huge amount about financial crisis, and could distill a lifetime of study and involvement in collapses succinctly: “it always takes longer than you think; but when it happens, it always happens [...]
This is a theme that Simon in particularly has been sounding. Now, according to the Telegraph, a confidential European Commission memo confirms this. To review, the basic problems, relative to the U.S., are: Disproportionately large banking sectors (the Iceland problem) in some countries, such as the U.K. High exposure to U.S.-originated toxic assets (up to [...]
I had a heated discussion about our new baseline scenario yesterday with some angry European politicians. Specifically, the most agitated were from the eurozone and they find our assessment of the risks and likely futures in that region to be unacceptable. In their view, this is an American problem and that is where the impact [...]
Back in the exciting days of October, Peter, Simon, and I wrote an op-ed in The Guardian about the potential for cracks to appear in the Eurozone, even possibly leading to one or more countries withdrawing from the euro. With so many other things to worry about, this scenario didn’t get a lot of attention. [...]
When times are tough, governments have to borrow money. Luckily for us Americans, we can borrow it for free (for now at least – I know this isn’t going to be true forever): 3-month Treasuries have a yield of 0.01%, and even 3-years are at 1.25%, both below the rate of inflation. (By the way, [...]
Having woken up to the fact that inflation is not the thing to be worrying about, the UK, Eurozone (European Central Bank), and Switzerland all cut interest rates, the Bank of England by a completely unexpected 1.5 percentage points to 3.0%. Disappointingly, the ECB only cut rates from 3.75% to 3.25% (we earlier recommended an [...]
So far, rising spreads on credit default swaps have accurately predicted what sectors of the global economy would run into trouble next. The sharp rise in spreads on emerging market countries’ debt is old news. But recently, CDS spreads have been rising for countries that are part not only of the EU but of the [...]
Just a couple weeks ago, European finance ministers were insisting that the credit crisis was an American invasion that they were adequately prepared to repel, with German Finance Minister Peer Steinbrueck insisting that an American-style rescue plan was not required in Europe because the financial crisis was an “American problem.” As we’ve learned over the [...]
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Cognitive Dissonance and Global Macroeconomics
October 18, 2009 in Commentary
Tags: europe, macroeconomics
One of our readers not only suggested this post, but even sent me all the links; I’m just now getting around to writing it up. Thanks. There has been a lot of talk about global imbalances, with most opinions varying from somewhat important (us) to very important (many global policymakers). Here’s Jean-Claude Trichet, for example, [...]